1 eFX Daily colour

1.1 FX Spot

1.1.1 Overview

By Jan Sluis-cremer - Institutional Sales Specialist (Feb-17)

The rand continuing to track gains on Friday and trading down to 18.30 in the late afternoon session. Overall the rand finishing the week with a gain of around 0.40% and in line with all Emerging Market currencies with the exception of the Turkish lira that lost 0.66% in the week.

On Thursday President Trump announced that he would impose reciprocal tariffs on all countries that put import duties on the US. However this is going to take some time to draw up, so in the interim there is some breathing space for global markets.

On Wednesday all eyes will be on the Finance Minister when he delivers his budget speech to parliament. The Finance Minister may be considering raising VAT, personal income and corporate taxes to offset a revenue shortfall which was reported in the media over the weekend.

In the Asian session this morning, most currencies traded slightly weaker ahead of a US bank holiday today and concerns over new tariffs coming from Donald Trump’s administration. The Japanese yen was the outlier, which strengthened after better than expected fourth quarter GDP data.

The rand starts the week off at 18.35 to the green back. With today being a US holiday and our local budget on Wednesday we look for ranges to continue.18.25 to 18.55 trades for now.

Against the crosses:

  • EUR/ZAR kicks off at 19.26
  • GBP/ZAR starts at 23.12

On the data front today the only data out is from the Euro zone at midday local time when they publish their December trade balance number.

1.1.2 US

(Feb-13) CPI print yesterday supported FEDs decision to hold rates steady and the general talks between US and Rassia to end the war has boosted risk sentiments.

(Feb-17) We saw a general USD weakness on Friday across the board which was related to various factors and optimism around de-escalating geopolitical risks, this however is still not yet confirmed.


1.1.3 SA

(Feb-10) SA’s Finance Minister, Enoch Godongwana, will deliver the 2025 Budget Speech on Wednesday, February 19th. The speech will outline the government’s financial, economic, and social commitments for the year, focusing on balancing economic growth with support for vulnerable communities.

  • Saw the market aggressively rejecting the move lower in ZAR, but the RAND charged ahead to lows of 18.30s.
  • Very little support for Rand below 18.40.

1.1.3.1 eFX Volumes

  • Overall volumes

(Feb-17) Volumes improved towards the end of the week, with 3 days trading higher that the recent ADV.

  • Price to volumes

(Feb-13) Clients ended yesterday being net-short ZAR: - Range for today: 18.60 - 18.30.

(Feb-17) Saw the market reject the move lower in ZAR, with implied topside at 18.65.

  • Liquidity hours across currency pairs
  • Currency positions

(Feb-10) Clients are now net-long USDZAR.

(Feb-11) We see continued net-long positions in ZAR.

1.1.3.2 USDZAR levels

(Feb-14) ZAR not showing any trend for now:

  • We now await for the Budget speech next week.
  • JSE Top 40 hits all time high of 81078.

(Feb-17) Saw the market reject the move lower in ZAR, however the the weaker USD on Friday (Feb-14) saw ZAR hitting lows of 18.2995.

  • However, there is little support for ZAR below 18.40.
  • VWAP for usdzar has moved from 18.70 to 18.50 and now at 18.40. This is a clear demonstration of the Rand inroads.
  • The rand is still working 18.30, but its not a lvl yet.
  • Range for today still at 18.60 - 18.30.

1.1.3.3 USDZAR spreads

(Feb-14) Spreads remain surprisingly narrow today, due to the unexpected sudden move lower in ZAR. This move seems to have been largely driven by a general USD weakness.

  • DXY saw its lowest level this year and continues to hit new lows for the year (even now its trading at its lowest lvl for the year 106.58)
  • Good ZAR flow on the equities space as we see the JSE top 40 also hitting all time high of 81266
  • Can really attribute the narrow spreads to skews as LPs would be trying to offload risk, given the trending mkt, volumes unusually high for a Friday.

1.1.4 Key events this week:

  • Presidents Day holiday in the US; bond and stock markets are closed, Monday
  • Australia rate decision, Tuesday
  • UK jobless claims, unemployment, Tuesdayy
  • Canada CPI, Tuesday
  • New Zealand rate decision, Wednesday
  • UK CPI, Wednesday
  • South Africa (SA) CPI, retail sales, Wednesday
  • SA’s 2025 Budget Speech, Wednesday
  • US FOMC minutes, housing starts, Wednesday
  • Australia unemployment, Thursday
  • China loan prime rates, Thursday
  • Eurozone consumer confidence, Thursday
  • G-20 foreign ministers meet in South Africa, Thursday - Friday
  • Eurozone HCOB manufacturing & services PMI, Friday
  • UK S&P Global manufacturing & services PMI, Friday
  • US S&P Global manufacturing & services PMI, Friday

1.2 FX Volatility Update

1.2.1 Update

By Thuto Mukena - Institutional Sales Specialist (Feb-17)

  • Overview

The 1-week USD/ZAR volatility risk premium has slightly narrowed below its 1-week average as risk conditions remain calm. While Trump’s tariff plans continued to drive sentiment last week, the lack of an immediate implementation provided some relief to financial markets. As a result, the 1-week USD/ZAR implied vol tracked spot moves lower, closing at 11.52%, down 0.58 vol points on the day. This morning, implied vols opened slightly bid, though moves should remain limited given the U.S. is out for Presidents’ Day. The key event for the week will be Wednesday’s local CPI print, with consensus expecting inflation to ease slightly from 3.6% y/y to 3.5% y/y.

  • EM & G10

Both G10 and EM implied vols softened as risk conditions remained stable. In G10, EUR/USD 1-week implied vol saw the biggest move, dropping 150bps from the open, while GBP/USD followed, declining 125bps.In high-beta EM, implied vols tracked spot as EM currencies strengthened on the day. USD/MXN 1-week implied vol fell sharply, down 232bps, while USD/INR 1-week implied vol also edged lower, closing 76bps below the open.


1.3 Africa

1.3.1 Update

By sizwe Mfayela - Institutional Sales Specialist (Feb-14)

  • Egypt

    • IMF will consider Egypt’s Resilience and Sustainability Facility request at the same time when the IMF conducts the country’s fourth loan program review.
  • Kenya

    • Kenya widened its 2024/25 and 2025/26 fiscal year budget deficit estimates to 4.9% and 4.3% of GDP, respectively.
  • Ivory Coast

    • Ivory Coast started negotiations with Eni SpA over a new exploration block.
  • Nigeria

    • Nigeria’s January crude oil production rose to an average of 1.54mio bpd, up from 1.48mio bpd in Dec.
    • The Nigerian parliament approved President Tinubu’s NGN 54.99trio ($36.4bio) budget for the 2025 fiscal year, which is 9% higher from the NGN 49.7trio proposed in December. The government has also made a $200mio provision to fill the funding gap created by the US aid suspension.
  • Rwanda

    • The Rwanda central bank left interest rates unchanged at 6.5% for the second MPC meeting in a row as it sees inflation remaining sticky in the near term, with 2025 inflation estimated to average 6.5%.
  • Senegal

    • Senegal is in conversation with the IMF to secure a new program that is aimed to commence in June this year. the country aims to extend debt maturities and do debt swaps in efforts to reduce the debt to GDP ratio from almost 100% to around 70% of GDP in the next few years.
  • Zimbabwe

    • The IMF is engaging Zimbabwe on a staff-monitored program following a trip to the country from 30 Jan to 13 Feb to initiate discussions on the key parameters of the program. Zimbabwe currently has $21bio of external debt it defaulted on.
  • Eurobonds

    • Another strong session for SSA credit with decent volume trading overall.
  • NGERIA

    • A couple real money accounts stepped in to sell into what was a very robust local bid, and near the end of the day that local bid felt closer to filled, but street dealers were left short paper, and that maintained a bid tone to the curve.
  • ANGOL: Locals sold into ETF and street bids

  • IVYCST: Flows were relatively light, but overall turned two-way, with the bid for the $ bonds on the curve going softer.

  • KENINT: Some fiscal-related headlines yesterday but flows were muted, with locals net sellers of risk to add to the real money account selling.

  • SENEGL: Was very much in price discovery in a 3pt range since the headlines hit on Wednesday as bid and offers felt very skittish, forcing swift repricing on each print. Overall, SENEGL underperformed on the day with the curve bear flattening.

  • SOAF: An active session with headlines keeping flows on the curve two-way. US PPI came out higher than expected - after a higher-than-consensus CPI print yesterday - but that softened the bid only for a split second. Real money and ETFs were net buyers of risk, whilst there was selling from the street. Long-end continued to trade better, with front-end bonds catching a bid.

1.3.2 Economic data

Economic data releases